OSF, insurer forming an accountable care organization

Thursday

May 16, 2013 at 12:01 AMMay 16, 2013 at 3:05 PM

The area’s largest hospital system is teaming up with the state’s largest health care insurer, gambling they can save money by improving the quality of health care — a proposition that’s driving most of the major innovations and issues in health care.

Pam Adams

PEORIA — The area’s largest hospital system is teaming up with the state’s largest health care insurer, gambling they can save money by improving the quality of health care — a proposition that’s driving most of the major innovations and issues in health care.

In 2012, OSF Healthcare was selected as one of the first 32 systems in the country to pioneer a new, more accountable way to deliver health care to Medicare patients. The commercial ACO agreement with Blue Cross will be similar to OSF Healthcare’s public ACO with the Centers for Medicaid and Medicare Services.

As with the federal ACO, the agreement with Blue Cross basically makes OSF Healthcare and its network of physicians and other providers responsible for the results. If patients show improved outcomes, such as reductions in unnecessary duplication of services, emergency room visits or hospital readmissions and increases in overall patient satisfaction, OSF Healthcare receives incentives and bonuses based on the shared savings expected to occur. If savings don’t occur, OSF Healthcare loses money.

Bob Sehring, OSF Healthcare’s chief ministry services officer, who is responsible for the system’s accountable care organizations, prefers to call ACOs an investment rather than a gamble.

“At the end of the day, we’re more involved on the risk side than we have been before,” he said. “In the past we were paid for each service we provided. Now we’re focused on providing the right care to the right patient at the right time in the right setting.”

The ACO begins Jan. 1, 2014, and involves about 40,000 people covered under Blue Cross’ PPO, or preferred provider organization, who have been identified as receiving most of their care from OSF Healthcare facilities and physicians in Peoria, Pontiac, Bloomington, Galesburg and Rockford.

“They can go anywhere they want. It’s OSF Healthcare’s job to make sure they don’t want to go anywhere else,” said Bill Patten, divisional vice president of professional network management at Blue Cross Blue Shield.

Because most PPOs are self-funded, Patten expects clients to save money, also.

Patients will see the benefits of enhanced care, according to Sehring, particularly the five percent, or 2,000, with multiple chronic conditions who account for an inordinate share of health-care costs.

It is OSF Healthcare’s first commercial ACO and Blue Cross’ second. The insurer created an ACO with Advocate Healthcare, the state’s largest hospital network, in 2011. The partnership also expands on an earlier pay-for-performance relationship between OSF Healthcare and Blue Cross.

In each case, officials said results of quality-of-care measurements and cost-savings were encouraging. Both OSF Healthcare and Blue Cross said they expect to form more ACOs, respectively, with other insurers or other hospital systems.

Part of the trend to form ACOs comes from the health care reform law, also known as Obamacare, and its emphasis on coordinating care and reducing costs.

“It’s perhaps the last best chance to change the way we finance health care today,” Sehring said. “The growth of health care costs over the last 20 years is unsustainable.”

Sehring said he didn’t see how the partnership would add fodder to an anti-trust lawsuit against OSF Healthcare filed by Methodist Medical Center, now known as UnityPoint Health-Methodist. The lawsuit claims OSF Healthcare has locked UnityPoint Health-Methodist out of business with major insurers.

“The agreement with Blue Cross was in the works before that,” Sehring said. “Quite frankly, we think it’s (the ACO partnership) the right thing to do for our patients and Blue Cross members.”

Pam Adams can be reached at 686-3245 or padams@pjstar.com. Follow her on Twitter at padamspam.